Ethiopia's mining paradox?

Ethiopia’s governing Prosperity Party (PP) has identified mining as one of its ‘five pillars’ of development: a lifeline for the faltering birr. When interviewed in February 2025, Habtamu Tegegne, Ethiopian Minister of Mines, announced that mineral exports were becoming an ‘important driver’ of economic growth, particularly gold, from which Ethiopia would ‘benefit immensely’. The PP has pursued a strategy to combat and capture ‘illegal’ artisanal and small-scale mining (ASM) while expanding ‘official’ industrial projects. It intends to open Ethiopia’s lucrative ‘peripheries’ to investment and development.

Yet mining is inseparable from politics. Unmentioned by Habtamu were the conflicts that have engulfed Ethiopia’s principal gold-producing regions since 2018; Tigray, Oromia, and Benishangul-Gumuz. Rarely is it in the interests of the investment-eager governments or firms working in ‘frontier markets’ to speak openly about security issues.

With limited media access, moreover, reporting on Ethiopia’s mining sector usually takes one of two approaches. It emphasises soaring gold prices and resource potential, prioritising Ethiopia’s dormant subterranean world over its unsettled social one. Alternatively, it stresses the environmental damage and volatility of ASM, which employs over 1.26 million people, of whom 94 per cent are non-licensed. ‘Official’ industrial projects are comparatively neglected.

Under such turbulent circumstances, the PP has not only struggled to execute its mining strategy but inadvertently exacerbated crises through actions framed by regional ethnonationalist opponents as enduring historical oppression from the centre. The Ethiopian government thus confronts a seeming paradox: it cannot resolve instability without industrial growth; but equally, it cannot secure growth boosting industry without first resolving instability.

Gold and insecure states

Rising gold prices amid global instability and weakening confidence in the dollar have turned attention to north-east Africa, across which stretches the Arabian-Nubian Shield, containing some 48 million ounces of gold. Ethiopia’s major deposits – Kurmuk (Benishangul-Gumuz), Lega Dembi (Oromia), and Tulu Kapi (Oromia) – harbour an estimated 2.1, 2.6, and 1.7 million ounces, respectively.

Yet resource wealth can often worsen fragmentation in insecure states. Regionally, Sudan’s war (April 2023–present) illustrates this dynamic at its most destructive. In Sudan, unregulated ASM accounts for 80% of gold output. Conflict between the Sudanese Armed Forces and the Rapid Support Forces has been fuelled by gold smuggling, mostly into Egypt and onward to the UAE.

Like Sudan, the Ethiopian state has long struggled to maintain central authority over its territories. Historically, the northern highland polity represented its authority as radiating from its ‘core’ – its centre of power, now Addis Ababa – to its ‘peripheries’ – areas deemed geographically or socially marginal. This pattern was reinforced by nineteenth-century imperial expansion into new resource-rich peripheries, famously under the rule of Emperor Menelik II. By the 1960s, this had caused politicised peripheral groups to feel marginalised along ethnic lines. In 1991, following decades of armed conflict, the Ethiopian People’s Revolutionary Democratic Front (EPRDF) coalition, led by the Tigrayan People's Liberation Front (TPLF), ousted the imperial state’s successor, the Derg, ushering in Ethiopia’s current federal system.

Ostensibly, the EPRDF presided over an ever-expanding federation of semi-independent, ethnically based regional states. The party’s parallel, top-down vanguardist doctrine of ‘revolutionary democracy’, however, sought to direct development from an opaque centre; economic growth, it was hoped, would neutralise ethnic division. Together, federalism and ‘revolutionary democracy’ represented competing visions, reconciled only through fluid networks of loyalty between the central and regional governments. Ultimately, established institutional norms preserved the familiar core–periphery dynamic.

Ethnic federalism has formalised identities rooted in anti-imperial narratives, enabling political opponents to cast the centre as inherently neo-imperialistic. Tigrayan elites were perceived to have benefited disproportionately, leaving peripheral nationalities to live in poverty beside mega-projects whose benefits they would never see. A decade after the disputed 2005 elections initiated the EPRDF’s slow decline, Oromo-led protests propelled Abiy Ahmed to power in 2018, whereupon he dissolved the EPRDF coalition and established the PP.

The ‘legibility’ of ASM

Abiy inherited an ‘insecurity complex’: a weak state atop a diverse, multilayered, political ecology of overlapping interests and suspicions. From this emerged the Tigray War (2020–22), as the still-powerful TPLF resisted the PP’s centralising order. Mining became a key node in the conflict, as the central government lost access to 2.6 annual metric tonnes of Tigrayan gold, worth roughly USD 100 million.

Tigray’s post-war relationship with the central government remains shaped by the ‘insecurity complex’. Smuggling has persisted under the Interim Tigray Administration (ITA) – still dominated by TPLF members. An estimated 6 tonnes continue to bypass the central government annually, smuggled through networks of officials, local brokers, and foreign companies.

Over 2024/25, the TPLF leadership bifurcated into a centre-loyal ITA faction, led by Getachew Reda, and a second faction, reportedly aligned with Eritrea. A report by Chatham House identified control over Tigray’s artisanal gold production as contributing to the split, fuelling fears that Tigray could soon resemble Sudan. In June 2025, the ITA’s new president Tadesse Wereda dispatched a task force to combat, curb and capture ‘illicit’ ASM operations, with the likely intention of reining in the unruly TPLF faction.

The role of factional politics may not be the only explanation for the ITA’s crackdown on ASM, but it is certainly the strongest. Other possible explanations for the PP’s suppression of ASM in Tigray, such as ASM’s chemically-induced environmental and health harms, are comparatively exaggerated. Getachew Reda attributed these harms to weak enforcement when he faced protests during his tenure in early 2025; yet little action followed. Only months later – after the TPLF split was formalised with Getachew’s retreat to Addis Ababa, weakening the centre-loyal ITA – was the government task force deployed. This suggests political rather than environmental motives. Environmental concerns appear less significant yet, considering the comparable harms associated with large, licensed industrial mines in Oromia, long supported by the state.

Nor does the ITA’s crackdown reflect the government’s simple preference for the efficiency of industrial mining. Tigray’s disturbed post-war situation has delayed the revival of its industrial projects. By contrast, even while its ASM sector was being dismantled, 18.9 tons of gold were extracted from Tigray in 2024/25, accounting for half of Ethiopia’s gold exports that year.

The Ethiopian government’s approach is therefore neither explainable in purely ecological nor economic terms. It is, rather, best understood through James C. Scott’s concept of ‘legibility’: the state’s attempt to render assets visible, standardised and controllable. If, in post-war Tigray, ASM’s informal network of arrangements resembles a natural ecosystem – adaptive and decentralised – ‘official’ mining resembles a zoo, where the zookeeper – the state – knows precisely who and where its animals are, and exercises exclusive authority.

Imperial history and industrial mining

The establishment of industrial mining projects – being the most ‘legible’ form of ‘official’ mining – can limit the spaces in which rivals can emerge. Frequently, however, this backfires. Harnessing anti-imperialist narratives, critics have identified Abiy’s regime as a ‘modern version of the Ethiopian empire-state’, hungry for ‘the land, labour, and resources of marginalized people’. Of Tigray, one asked: ‘if Tigray can produce and deliver such a substantial volume of gold… why is there no structured system in place to guarantee that a predictable share of the proceeds is reinvested in the very region from which it is extracted?’

Ethiopia’s federalised split between central and regional bodies can strengthen such ethnic-rights narratives. In Tigray, regional officials aligned against the centre are protective of ASM, over which they exercise licensing authority; industrial projects, by contrast, fall under federal control. In Oromia, where PP’s regional counterpart controls the regional parliament, the dynamic differs, encouraging co-option rather than opposition. A 2023 Rift Valley Institute report on Oromia’s Guji zones argued that the industrial mining sector is increasingly reserved for those expressing loyalty to the PP. Co-opted regional elites have allegedly suppressed local resistance to industrial mining projects, often violently. Like Tigray, community resistance has centred on pollution-based health concerns and land expropriation, apparent during the controversial 2021 reopening of MIDROC’s Lega Dembi mine. Lacking official patrons, however, armed opposition in Oromia is more grassroots in character.

According to the report, ASM suppression in Guji has included the denial of licenses, underpayment, arrests, and the killing of traditional leaders, fuelling ethnonationalist sentiment and prompting historical comparisons to imperial-era extraction. This affords insurgent groups like the Oromo Liberation Army (OLA) with ample and compelling rhetoric, intensifying the Ethiopian government’s paradoxical situation.

The precarity of emerging industrial mining projects

Nascent projects in Western Ethiopia will likely both incur and create similar problems. By late 2025, KEFI Gold and Copper had raised USD 340 million for its Tulu Kapi project in West Wellega, Oromia, initiating the resettlement of 1,774 residents with risk assessments warning of high displacement impacts and the local presence of Oromo nationalist qeerroo. While KEFI pledges stringent safeguards, and it is too early to assess its local impacts, the vulnerability of the project is already clear: in 2021, four staff members were kidnapped, delaying progress. This followed separate OLA-claimed kidnappings of mining staff in Wellega, purportedly motivated by displacements, poor community compensation, and environmental harms caused by mining.

The gold-rich Benishangul-Gumuz’s regional border with Sudan creates a transnational dynamic. As recently as July 2025, the OLA was accused of killings and sexual violence in Metekel, while artisanal gold was smuggled across the border. MIDROC’s Metekel mine has struggled, with production officially ‘delayed’ by ‘regional peace instability’.

Nearby in Kurmuk, the Canadian firm Allied Gold holds mining rights. It was denied access, however, by regional authorities protective of ASM, arguing that the livelihoods of pastoralists depended on it. After years of stagnation, Allied was confidently acquired by China’s Zijin Metals in January 2026, ahead of planned production that year. Just two weeks later, however, Reuters reported that RSF troops – possibly with UAE encouragement – were being stationed within Benishangul-Gumuz. On 19^th February 2026, Kurmuk town was bombed by a suicide drone, killing one. As Ethiopia’s possible role in Sudan emerges, therefore, both artisanal miners and nascent industrial projects are increasingly endangered.

Beyond the conflict trap

Ethiopia’s ‘insecurity complex’ is deeply intertwined with its regional mining sectors. While the PP’s crackdown on ASM seeks to render the sector ‘legible’, industrial projects aim to boost growth, strengthen the state, and break cycles of violence; they are two sides of the same coin. Yet despite these efforts – and often because of them – Ethiopia’s gold regions remain caught in what Paul Collier terms a ‘conflict trap’: recurrent violence driven by low income, weak growth, and reliance on exportable commodities such as gold. These counterproductive outcomes occur because Ethiopia’s growth-boosting strategies appear coercive and exclusionary. The PP currently lacks the political and rhetorical deftness to respond to the compelling anti-imperialist narratives.

Ethiopia’s imperial history puts the PP on the moral backfoot in mining regions. Habtamu Tegegne was criticised in November 2024 for avoiding parliamentary scrutiny over uncollected Community Development Funds and incomplete surveys, undermining transparency. Regular, transparent, and widely publicised financial and environmental audits are essential to combat volatile claims of regional preferentialism that thrive in atmospheres of rumour and mistrust.

Positive incentives for the artisanal sector must replace coercion, encouraging voluntary registration without reinforcing conflict. Recent plans to expand private sector gold purchasing – replacing ASM premiums meant to promote legal sales – must be sequenced carefully to avoid pushing miners back to informal markets due to a lack of banking access.

More broadly, tensions across all mining sectors may be eased by enforcing Ethiopia’s constitutional commitment to socially and environmentally sustainable development, which is not adequately guaranteed by the current Federal Mining Proclamation.

Finally, if reports prove correct, the government must choose between hosting RSF forces in Benishangul-Gumuz or investing in its people and industrial potential; the two cannot coexist. The same applies in Tigray, where renewed low-intensity conflict in early 2026 threatens a regional war.

Ethiopia’s mining paradox will persist as long as coercion overshadows carefully designed reforms that transcend core–periphery logic.